CHAPTER 6: CONCLUSION AND RECOMMENDATIONS
6.2 RECOMMENDATIONS
It is important to note that South Africa does have international agreements and relations in place with other states. However, the agreements for specifically protecting and promoting foreign investments are currently not renewed when the period of the agreement expires. Section 15(1) of the Protection of Investment Act states that existing investments that were made under BITs will continue to be protected for the period and terms stipulated in the treaties. However, section 15(2) further stipulates that any investments made after the termination of BITs, but before the promulgation of the Protection of Investment Act, will be governed by the general South African law.
In this regard, the following recommendations that could have a positive effect on the country’s economic growth are made. Firstly, the fact that South Africa has terminated some of the BITs creates the impression that it is voluntarily isolating itself from the international investment community. Instead of terminating the second generation BITs, the government could renegotiate them under different terms, in order to align them with the changing needs of the country. This will ensure that South Africa will benefit more from BITs and boost its economy.
Second, although the South African law and the country’s judicial systems are solid
and sophisticated, they could still be complemented by international investment law. Looking at it from the foreign investor’s perspective, section 13 of the Protection of Investment Act may be worrisome to some investors. This section requires the foreign investor to obtain consent from the Minster of the Department of Trade and Industry before a matter can be elevated to the international investment arbitration in a case of a dispute. To resolve this issue, it would be better if the foreign investor were afforded an opportunity to choose whether to take the matter to a South African court, or an international investment forum.
Lastly, the IMST principles are one of the tools that may make a country an investor- friendly jurisdiction. These principles also form part of the common provisions of BITs and provide adequate protection to foreign investors in the host state. Therefore, the Protection of Investment Act should incorporate these principles with the aim of providing the same or better protection than is available at the international level.
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